United States-based online payments company PayPal is in the final stages of talks to acquire a 25% stake in Indian mobile payments firm FreeCharge for around $200 million (approximately Rs 1,357 crore), Mint reported on Friday. The possible sale will be discussed by Jasper Infotech Private Limited, FreeCharge’s parent company, in the first week of January, according to the report.
PayPal had initially made an offer for a 51% buyout. However, SoftBank, the largest shareholder in Snapdeal, which owns FreeCharge, is not too keen on selling a controlling stake, people with knowledge of the matter told Mint. “A final decision is pending,” one of them said.
While PayPal has hired Goldman Sachs as an advisor, Jasper Infotech is being counselled by Deutsche Bank. Snapdeal’s head of mergers and acquisitions Abhishek Kumar and Jasper Infotech Founder Kunal Bahl are leading the deal. The possible sale will also be subject to approval by PayPal’s board. All parties involved have either refused to comment or have denied any potential deal.
News of PayPal’s acquisition comes a little over a month after the company filed a trademark infringement complaint against Paytm for using similar colours in its logo. The complaint also claimed that Paytm’s use of the word “Pay” was part of its effort to access PayPal’s “global reputation” and to “grow its user base”.
The possible sale of stake in FreeCharge will also impact the mobile payments industry in India, which has seen a boost following the government’s demonetisation of high-value notes on November 8.